Abstract The irreversible Li + loss during solid electrolyte interphase (SEI) formation significantly critically constrains the energy density of lithium‐ion batteries (LIBs). To address this issue, we rationally design lithium N,N ‐dimethylglycinate (Li‐DMG) as an organic sacrificial salt (OSS) via substituent effect engineering, achieving a low decomposition potential (3.58 V versus Li⁺/Li). Li‐DMG delivers a near‐theoretical capacity (238.2 mAh g −1 , 96% efficiency) during initial charging. Incorporated into LiFePO 4 (LFP) cathodes, Li‐DMG/LFP||graphite full cells exhibit 17.3% higher initial discharge capacity (114.4 versus 97.5 mAh g −1 ) and 43.1% enhanced capacity retention after 200 cycles (67.1 versus 46.9 mAh g −1 ) compared to LFP||graphite full cells. Besides, Li‐DMG promotes the formation of SEI layer rich in more inorganic component, e.g., LiF, suppressing the degradation of electrolyte solvents and electrode structures. Furthermore, pouch‐type LIBs containing Li‐DMG demonstrate a prominent enhancement in the specific capacity (114.4 versus 87.1mAh g −1 ) and cycle stability (62.0 mAh g −1 after 4000 cycles versus 45.4 mAh g −1 after 500 cycles). This study provides a promising strategy for improving the energy density and cycle stability of LIBs through the use of OSSs with low decomposition potentials.